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Are diamonds forever?

For decades, moissanite has been a popular diamond substitute. Although the two have different chemical properties, moissanite looks diamond-like. Unscrupulous sellers in China have cheated less expert local consumers by charging them a real diamond price for a stone made from the far cheaper synthetic moissanite.

Recently, Huxiu, a news portal, reported that many online sellers have been touting jewellery made from what they call ‘moissanite diamond’ from Nepal. The stones even come with their own ‘GRA’ certification that looks distinctly similar to the documentation produced by diamond industry grader GIA (the Gemological Institute of America).“Vanity and a love for bargains are really some of the biggest weaknesses of human nature,” Huxiu concludes.

Over the past five years, the quality of synthetic diamonds – first produced in the 1950s for industrial uses like cutting and polishing – has increased to the point where they can compete visually with gems from out of the ground. Their price certainly appeals to more cost-conscious consumers: a 0.25-carat stone starts at $200 in retail, and 1 carat at $800 – less than a tenth of the price of high-quality natural diamonds.

At the moment, the volume of lab-grown diamonds amounts to between 3% and 4% of that of natural diamonds, Thomas Moses, executive vice-president at the GIA, told the South China Morning Post.

But demand is expected to grow as quality further improves. One investment bank forecasts that China’s market share in synthetic diamonds could go up to 15% in the gem quality melee diamonds segment (i.e. small stones) and 7.5% in larger stones by 2020.

China is already the biggest producer of synthetic diamonds in the world, says WallStreet.cn, accounting for as much as 90% of production since 2017. Paul Zimnisky, an analyst in the diamond and mining industry, reckons that China makes about 10 billion carats of synthetic diamonds for industrial use each year but currently only a small percentage goes into jewellery.

De Beers, the world’s largest producer and distributor of diamonds, is also getting into synthetics. The company, which controls about 30% of the world’s supply of mined stones, has recently launched a synthetic diamond jewellery label named Lightbox to differentiate from its ForeverMark and DeBeers lines, which sell natural diamonds.

“We see a massive opportunity to enter into the fashion jewellery market now by doing something that consumers tell us that they want but that no one else has done yet: synthetic stones in new and fun colours, with lots of sparkle and at a far more accessible price point than existing lab-grown diamond offerings,” De Beer’s Bruce Cleaver told media.

In an interview with WallStreet.cn, Zimnisky forecast that more activity from Chinese suppliers could cause the price of synthetic diamond jewellery to plummet. He said only a small fraction of China’s synthetic output would need to be upgraded and diverted to jewellery production for this to happen.

But would it impact on prices for real diamonds? “In general, synthetic and natural diamonds are two different markets. The price of synthetics will keep falling as China is producing more and more without any sense of proper marketing,” says Nelson Wai, a Hong Kong-based diamond expert. “Lab grown diamonds are a commodity with infinite supply and no value in the secondary market.”

Small wonder then, industry insiders remain sceptical that synthetic diamonds will replace natural ones. “It’s like comparing a fake luxury handbag with a genuine one. You can buy a knock-off for a fraction of the price and it looks almost identical to the real one. So why are the luxury brands still so sought after, and can justify selling a handbag at 10 times the price of a fake?” Wai opines. “People who can afford to buy real diamonds want to own something beautiful and with lasting intrinsic value.”

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